Credit Card

Pros and Cons of Credit Cards

Credit cards are the prevalent form of payment in our country. However, in spite of their convenience, there are some drawbacks to credit cards. While some contend that credit cards are pure evil, the truth is that they are tools. Whether or not they are tools that are likely to work for you depends on your financial goals and you situation.

Before you make a decision about whether or not to get a credit card, it helps to consider your own financial situation, and decide which card is mostly likely to help you meet your goals (if any card can do that). Here are some of the pros and cons of credit cards:

Advantages to Credit Cards

There are some advantages to using credit cards. Before you write them off as completely evil and useless, consider some of the advantages to using credit cards:

* Convenience: First of all, credit cards are convenient. Instead of carrying cash or checks, you carry a small piece of plastic. It’s easy to swipe credit cards for payment, and they are accepted all over the world. And, while you will pay fees for using the card in another country, it can get rid of the inconvenience associated with exchange cash. (Some point out that debit cards are just as convenient in this way.)

* Security: By law, you are protected from liability related to fraudulent transactions with credit cards. You are only liable for $50, as long as you follow procedure. (Some branded debit cards have similar protections, but getting them may include more onerous requirements.) You won’t see the same level of protection with cash and checks.

* Rewards: Many credit cards allow you to earn rewards. You can earn free travel, and you can even get cash back. While there are some rewards debit cards, they are few and far between. In many cases, your best bet for rewards is a credit card.

* Other perks: Credit cards often come with other perks. Some of these include concierge services, travel insurance, rental car...